Superbrands Feature: The Evolving CMO

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Fri, 07/30/2010 - 23:14

Late last year, after the market crashed, Victoria Treyger took a close look at Google search results and surmised that consumers had shifted away from extended air travel-driven vacations and were instead contemplating road trips and weekend getaways. Travelocity shifted its focus as well. By the time May rolled around, the company had launched a TV spot showing a couple racing away in over-the-top, action movie style to a hotel for the weekend, a departure from previous ads that had shown the brand's garden gnome icon in glamorous national and international locales. The company's Web site had also been engineered to take advantage of geotargeting so if a consumer logged in from, say, New York, they'd see promotions for vacation packages in nearby Boston or Long Island.

Treyger, the CMO of Travelocity, is somewhat atypical because hers is a Web-based company, but her use of Web-based analytics is hardly unusual. In fact, analysts who observe the chief marketing officer position say it's unrecognizable from a few years ago. While crunching numbers was always part of the job, new sources of data—from emerging media like interactive TV, mobile and social media—along with a need to show ROI have CMOs awash in data and newer, often younger marketers have adapted. Sometimes derided as "spreadsheet jockeys" they are a break in tradition from the "creative savants" of old who dreamed up big ideas and multimillion-dollar TV campaigns. Are the new breed of marketers better informed but more timid than their predecessors? Or have CMOs finally built up their credibility and achieved parity with others in the C-suite?

Whatever the case, the prevailing sentiment is that the job is getting more wonky. "In the near term CMOs that are sitting CMOs and that will come to be seated in the next year or so will be charged at harnessing digital, managing it and measuring it," says Lynne Seid, a partner for the global marketing practices at Heidrick & Struggles, the recruiting firm. As Tom Kline, chief scientist for the marketing firm Digital Scientists says: "It used to be MadMen, but now it's Revenge of the Nerds."

DATA EXPLOSION

Seid and Kline, who interviewed 111 top CMOs in December about digital marketing, say the realization that data like searches, trackbacks and tweets add up to valuable marketing data is just hitting a lot of companies right now, which sounds a bit suspect at first. After all, Google has been around for more than a decade and Yahoo!'s existed even longer. Search advertising is a huge business in its own right. What changed in the last year or so? Social media has gotten much bigger, the recession has put even more focus on ROI analytics and both these factors have prompted marketers to scrutinize Web-based data even closer.

For instance, for much of this decade, search has been viewed mostly as an effective advertising medium, but Kline said there's a lot more to it than that. As an illustration, he cited a company like Kraft, that is not likely to get a lot of business from consumers searching "cheese." On the other hand, search data related to a brand name, like the overall number of searches, is what Kline calls an "interim metric" that can tell a marketer—quickly—whether a promotion is working. So, a marketer like Burger King can get a crude measure the efficacy of its Star Trek tie-in by looking at searches "The search metric can be a leading indicator," he says. "It's so hard to find a leading indicator in that business." Similarly, Kline says marketers are just realizing that their Web site isn't just an online billboard, it's also a market research tool that yields granular data on consumers. Example: If marketers know that Facebook generates 15 to 20 percent of Google searches, they might notice that their company Web site produces a smaller number and wonder why. "There's an opportunity for a lot of CMOs to try to benchmark what is actually happening, like how many people are actually clicking onto my site from Twitter, just at a basic level and then go is that low, is that high? And then look at conversions. That's not really happening," Kline said. Marketers are aware of the opportunity. Three years ago, Walmart created a social network aimed at teens primarily as a means to market to them. But when Sears introduced its social networks this year—MySears and MyKmart—the goal was to get more data on consumers, said Rob Harles, vp-community for the company. "Ultimately, we're going try to use this to first and foremost learn about our customers and then secondly from those lessons figure out ways to integrate that into the overall shopping experience," Harles said.

In Treyger's case, the amount of data can seem overwhelming to an outsider. In addition to Google—which provides information about competitors and industry trends, she culls consumer data from Hitwise, Compete and Comscore among others and then looks at how consumers behave on Travelocity's site—namely shopping and booking patterns. For now, social media is primarily a marketing tool rather than a way to wring more data out of consumers, though Treyger said when the company relaunched its Web site in May, it used Twitter to get a read on how consumers were taking to the new site. (They liked it.) In addition, for the last three years Treyger has made use of mixed-media modeling, a sort of dashboard that uses statistics and econometrics to determine which media mix delivers the best ROI. For Treyger, a veteran marketer from Amazon, being immersed in such data is second nature. "Relying upon all of these different data sources is a regular part of the job. It’s kind of like having coffee in the morning," she said. "I wouldn’t think about making any key business decisions without relying on data, but it's not most of my job, it's part of my job."

TAKING CONTROL

According to Seid, Treyger is an aberration. Most of the marketers interviewed in her recent survey relied upon digital agencies—often as many as six or seven—to collect and interpret such data. "They're not being managed in the way creative agencies are managed or the way integrated or above-the-line agencies are being managed," Seid said of the digital agencies. "There's nobody inside that has the expertise that's on par or superior to the digital agencies. So the digital agencies are more or less setting the agenda."

Bob Lord, CEO of digital shop Razorfish, agreed. "We haven't gotten to the point where we have completely digitally savvy, 360-degree CMOs," he said. "The CMOs are still coming out of a more traditional mindset. Any kind of structure means there is a digital person reporting into the CMO so you do end up with a team on the agency side that is far more experienced than the digital ad manager or whatever that title is. They definitely look to the agencies to be the innovators and to be the pioneers to set the course a lot more than they do with a traditional agency."

Results from Seid's survey show why that's happening—44 percent of marketers felt that collecting and analyzing data regarding ROI and Web site activity should be done by the IT department while only 30 percent thought marketing should do it.

But should marketers be doing it? Al Ries, principal of Ries & Ries, Roswell, Ga., does't think so. "Marketing to me is much more of an intuitive, holistic job, not a data job," he said. "It seems to me the marketing people, too many of them, are running around doing all this measurement. The sales department doesn't do a lot of measurement, the finance department doesn't do a lot of measurement, the chief executive doesn't say 'They paid me X million dollars last year and I've measured it and here's how I've determined I'm worth the money.' It's only the marketing people who say we've got to be measured and it's the one department that's the most difficult to measure and in most instances, impossible to measure."

While some dig in their heels, though Seid sees the emergence of a digital CMO, which would be a liaison between the company, its digital agencies and the company's IT department. The digital CMO will have no problem with measuring data. "The true CMO that's truly digitally savvy in the future is going to blur the lines between what they do and what IT has to offer," she said.

This is already happening. The top marketing schools these days offer programs that are heavily immersed in technology. Wharton students, for instance, make use of the Wharton Interactive Media Center, which exposes them to the latest in Web marketing and computer-simulated marketing. Duke's marketing MBA program stresses computer models as well. "It's not that the CMO should be developing these models," said Christine Moorman, senior professor of business administration at Duke, "but they should have a deep understanding of them."

DIG THE NEW BREED

Such marketers being churned out by the top schools no doubt have an understanding of metrics that their predecessors lacked. But has something been lost in the process? Critics say the new breed of marketers are indistinguishable from accountants—a far cry from the right-brained marketers of years ago. "The CMO has evolved from Chief Miracle Officer to Chief Minutia Officer," said Drew Neisser, CEO of Renegade Marketing and founder of thecmoclub.com. Neisser said in the old days, CMOs would swing for the fences and try to come up with a big idea like the Aflac Duck or the Geico Gekko. "Then along came Google complete with truly measurable results and tectonic plates of marketing started to shift. Suddenly CMOs were emboldened to say 'I only want to do what produces measurable results.' This new kind of CMO is less interested in the monumental and more in the incremental, seeking a steady diet of singles and doubles over the infrequent but more showy grand slam."

Liz Miller, vp of programs and operations for the CMO Council sees it differently. "I think for a very long, not just the role of the CMO but of marketing in general has been redacted advertising," she said. "We've just been relegated to the corners as the guys who handle the window dressing and the 'pretty' part of the business." But Miller says as marketing has gotten more complex, marketers have gotten more respect in organizations.

The odd thing is, however, that even the most data-immersed CMO still has to at some point take a leap of faith. After all, no amount of modeling can really predict how consumers will take to a new ad campaign or product. "Numbers are terrific," said Ries. "The problem is trying to project that into the future, analyzing the past to project the future is a big, big problem. Oddly enough, that's the way people tend to use the data—look at the past and assume the future's going to be just like the past." For her part, Treyger says that marketing is a mixture of art and science. "The 'art' to marketing these days I believe is in being able to assess what all this infinite amount of available data actually tells you," she said. "You start with the science (the data) but in the end you look at ll the inputs and use your gut or 'art' to see the big picture and make decisions that will allow you to meet an unmet consumer need."